Btec Business Revision With Correct Answers

Breakeven When revenue and expenditure are the same. there is no profit or loss variable costs raw materials, change as output increases margin of safety is the amount by which sales would have to fall before the break-even point is reached total costs fixed costs plus variable costs break-even point when a business has made enough money through product sales to cover the cost of making the product selling price total revenue divided by maximum number of products increasing the price break even point falls reduce the price break even point becomes higher break even analysis planning tool that helps businesses to make the right decisions and increase their chances of success benefits of break even analysis business knows the fixed and variable costs linked to a product. the business can set the best price for a product. it allows the business to set a margin of safety.